APPLYING FOR AN SBA LOAN
By: Davina Palazzo, Executive Vice President of Coast National Bank and Manager of Small Business Lending Centers
Excerpts from an article that appeared in The Tribune’s 2006 “How To” special section
Have you ever dreamed of leaving your nine-to-five office job to start your own wedding photography business? Or maybe you’ve started your own business and need new equipment to be more competitive. If you’re interested in starting or cultivating your small business, a Small Business Administration (SBA) loan may be what you need to get your business up and growing.
The Small Business Administration offers loan programs to help qualified small businesses obtain necessary financing, especially if they’re not eligible for business loans through other lending channels. In the past, the SBA loan was known as the “last resort,” but thanks to recent legislative changes, SBA loans are as streamlined and accessible as conventional loans.
The first step to securing an SBA loan is finding an SBA Preferred Lender, like Coast National Bank. Not all lenders are created equal; only some banks have earned the SBA Preferred Lender status because of their exceptional programs and experienced lenders.
The second step to obtaining a loan is determining your eligibility. Your business must meet certain eligibility requirements to be considered for an SBA loan. These requirements include repayment ability from cash flow, good character, management capability, collateral and owners’ equity contribution.
The 7(a) loan is the most popular loan provided by the SBA. In order to apply, the loan must be personally guaranteed by those with at least 20 percent ownership in the business. Also, the business must be for-profit, meet size standards, have insufficient internal resources to provide financing, and demonstrate repayment ability. If the business is just starting, a complete business plan will also be necessary.
Once you feel your business meets eligibility requirements, you can begin filling out the application for your SBA Preferred Lender. Bank personnel can assist you in gathering the information necessary to complete the process. Within a short time you will know whether or not your business has been approved for an SBA loan.
Find out the next steps to applying for an SBA loan by contacting Coast National Bank’s Preferred Lending Center at 805-547-6125.